Buy Now Pay Later – The Breakdown

 In Finances, Lifestyle

The buy now, pay later (BNPL) trend has taken off Australia wide – both online and in store. For those of you unaware, the concept of BNPL is essentially a reverse layby, with the customer still paying over a set period, but instead receives the product at time of purchase. The benefits offered to both customers (receiving their goods/services immediately with affordable payments) and retailers (moving stock much faster) have fueled the growth for BNPL options. At the moment there are three companies offering this solution in Australia: AfterPay, ZipPay and OpenPay. [1]

Of course, there are obvious pros and cons to this new payment method so it is important to know the ins and outs of each one before committing to that purchase.


AfterPay gives customers the option to pay two weeks later, and in four fortnightly instalments – the first instalment payment is immediate for first-time users and for orders amounting to $500 or more. Instalments are charged directly to the customer’s credit/debit card.

PROS: Afterpay say “customers should only ever spend what they can afford to pay back. To make sure of this, we take time to get to know our customers before enabling them to spend more.” Afterpay sets sensible initial spending limits that increase to a maximum of $1,500 over time. They assess every order request using our proprietary real-time Repayment Capability Check to determine spending capacity and a customer’s ability to repay on time. [2]

CONS: Afterpay charges a $10 late fee for instalments unpaid. Additionally, the customer is required to have a quarter of their order total in their account to begin payments.


ZipPay and ZipMoney are affiliated companies that offer very similar services, but with some basic differences.

For one, ZipPay functions like AfterPay, and is designed for smaller purchases (under $1000), while ZipMoney is targeted at merchants and retailers who sell more expensive products and services (such as educational courses, digital cameras, furniture etc). ZipMoney allows for purchases up to $10,000, which is significantly higher than with ZipPay. Therefore, the fee structure and procedure for these two services differ significantly.

ZipPay has no fixed instalment payment plan, which means a customer can choose to pay via weekly or monthly instalments. Customers are required to pay at least $40 a month for their purchases.

PROS: Customers aren’t required to have a specific amount in their account and only need to set up a payment schedule.

CONS: Not everyone can sign up to use Zip pay. Upon signing up, they run a credit check and if you do not meet the criteria you are restricted from using the service. [3]


OpenPay is a relatively new startup – their service is offered on a small handful of online retailers. The service shares many similarities with AfterPay and ZipMoney/ZipPay. OpenPay has a purchase limit of $10,000, and also allows for a longer financing term of up to 12 months.

PROS: OpenPay can be thought of as having a combination of features of the above two.

CONS: Only available at a limited number of retailers at this time. [4]

Sounds too good to be true, right? Just remember to stick to a budget, steer clear of using credit cards and set up payment reminders. Happy shopping! 


[1] Cin7. 2018. The rise of the buy now, pay later service. [ONLINE] Available at: [Accessed 23 November 2018].

[2] Mouth of Mums. 2018. The Afterpay Trap Getting Teens in Trouble Read more at [ONLINE] Available at: [Accessed 23 November 2018].

[3] Web Design Creative. 2018. The Pros and Cons of Afterpay vs zipPay. [ONLINE] Available at: [Accessed 23 November 2018].

[4] Neocreative. 2018. The Pros and Cons of Afterpay vs zipPay. [ONLINE] Available at: [Accessed 23 November 2018]


Oak Financial Planning Pty Ltd ABN 78 126 751 335, trading as Oak Financial Planning is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited, Australian Financial Services Licence and Australian Credit Licence 232706.

This blog article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.

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